"Despite concerns over aging populations and infrastructure, indebtedness and slow growth," the report says, cities in North America and Europe are forecast to keep their competitive edge on the rest of the world.

So how does EIU determine a competitive city? They measure competitiveness based on 32 indicators in these eight categories: economic strength, physical capital, financial maturity, institution character, human capital, global appeal, social and cultural character, and environment and natural hazards.

Here's how the report ranks the top 20 cities out of the 120 cities the report studied:

1. New York

2. London

3. Singapore

4. Hong Kong

5. Tokyo

6. Sydney

7. Paris

8. Stockholm

9. Chicago

10. Toronto

11. Taipei

11. (tie) Zurich

13. Amsterdam

14. Washington, D.C.

15. Copenhagen

15. Seoul

17. Los Angeles

18. San Francsico

19. Boston

20. Frankfurt

20. (tie) Melbourne

"Major cities in India, Brazil, and other emerging markets are expected to improve their competitive position and gain ground on many cities in more established economies," said Leo Abruzzese, the EIU's global forecasting director. "Strong economic growth, improving physical infrastructure, and increasingly skilled labor forces will boost emerging cities' competitiveness, though North American and Western European cities will ultimately retain their competitive advantage."